MedServices, Inc., is divided into two operating departments: the laboratory and tissue pathology. The company allocates delivery and accounting costs to each operating department. Delivery costs include the costs of a fleet of vans and drivers that drive throughout the state each day to clinics and doctors’ offices to pick up samples and deliver them to the centrally located laboratory and tissue pathology offices. Delivery costs are allocated on the basis of number of samples. Accounting costs are allocated on the basis of the number of transactions processed. No effort is made to separate fixed and variable costs; however, only budgeted costs are allocated. Allocations for the coming year are based on the following data:

Support Departments Operating Departments Delivery Accounting Laboratory Pathology Overhead costs $240,000 $270,000 $345,000 $456,000 Number of samples = = 70,200 46,800 Transactions processed 2,000 200 24,700 13,300 Required:

1. Allocate the support-department costs using the direct method. -

2. Allocate the support-department costs using the sequential method. lop8